Balfour Beatty US arm fined £49m for defrauding the military
Balfour Beatty has been fined £49m after its US subsidiary company was found guilty of defrauding the US Department of Justice out of millions.
The FTSE 250 building company admitted that its US arm had incorrectly claimed performance incentive fees between 2013 and 2019 for maintenance work on US military housing.
Balfour Beatty Communities, one of the US military’s largest private landlords, pleaded guilty to one count of fraud and has agreed to the appointment of an independent compliance monitor for a period of three years as part of a resolution reached with the Department of Justice.
The company will pay a total resolution amount of $65.4m (£49m) comprising $33.6m in penalties and $31.8m for restitution.
“Balfour Beatty is committed to the highest standards of ethical conduct,” the disgraced parent company wrote in a statement. “The wrongdoing that took place is completely contrary to the way the Company expects its people to behave. The Company apologises for the actions of Communities to all its stakeholders. It has been made clear to all employees that breaches of policies, procedures, or law will not be tolerated.
Balfour Beatty said it had undertaken an in-depth review of operations by its US arm in 2019 and implemented a series of changes as a result to prevent this type of misconduct from occurring in the future.
The news comes after a strong start to the year for Balfour Beatty which doubled its profits in the first half of 2021, which jumped to £51m in the first half of 2021 compared to £20m in the previous year. Shares jumped 2.27 per cent today after news of the resolution with the US Department of Justice emerged.
Read more: Balfour Beatty doubles profit in the first half of 2021